Trade Policy Lens: Perspectives That Power Policy
Facilitating trade, investment and regional economic integration between India and the UAE, with the UAE acting as a gateway to wider markets.
Signing of the CEPA
A Landmark Partnership Agreement
India and the UAE signed the Comprehensive Economic Partnership Agreement in February 2022, and it entered into force on 1 May 2022.
Ambitious Target: The agreement aims to raise bilateral non-oil trade to USD 100 billion within five years of implementation (by 2027).
Core Goal: Deepen regional economic cooperation and integration through faster, more predictable market access.
Why This CEPA Matters
Transformative Market Access
The UAE eliminates or reduces tariffs on over 97% of its tariff lines, covering about 99% of India's exports by value. This creates unprecedented opportunities for Indian exporters across multiple sectors.
Key labour-intensive sectors benefit from preferential market access and tariff duty elimination, directly supporting employment generation and export growth.
Strategic Benefits
- Boost Bilateral Trade: Enhanced market access expected to significantly increase trade volumes
- Support Export Growth: Elimination of tariff barriers accelerates India's export competitiveness
- Strengthen Supply Chains: Deeper integration through UAE's regional hub role
- Predictable Framework: Rules-based approach provides certainty for businesses
Key Sectors in Focus
Gems and Jewellery
Priority sector benefiting from preferential tariff access, leveraging India's global leadership in gems and jewellery manufacturing and trade.
Textiles and Apparel
Enhanced market access for India's textile and garment exports, supporting millions of workers in this labour-intensive sector.
Leather and Footwear
Duty elimination creates opportunities for Indian leather goods and footwear manufacturers in UAE markets.
Pharmaceuticals
CEPA establishes a framework for regulatory cooperation and facilitation for approved Indian pharmaceutical products in the UAE.
Engineering Goods
Tariff benefits for India's engineering sector, including machinery, equipment, and manufactured products.
Agri-Based Products
Market access for agricultural and food processing exports, connecting Indian farmers to Gulf markets.
Services Sector Opportunities
High-Value Services Trade
Services such as IT, business, professional, tourism and education also benefit from improved market access commitments under the CEPA.
This diversifies India's export basket beyond goods and leverages competitive advantages in knowledge-intensive services.
Pharmaceutical Cooperation Framework
A significant achievement of the CEPA is the establishment of a dedicated framework for regulatory cooperation and facilitation for approved Indian pharmaceutical products in the UAE. This streamlines market entry processes and strengthens India's position as a global pharmacy.
UAE as a Growth Hub for Indian MSMEs
Hub-and-Spoke Model
The CEPA positions the UAE as a strategic hub for Indian firms, creating opportunities for MSMEs to participate in global value chains and expand their market reach beyond bilateral trade.
Capital Goods and Intermediates
UAE serves as an efficient hub for sourcing capital goods and intermediate inputs for Indian manufacturing firms, reducing supply chain costs.
Warehousing and Logistics
Indian companies can leverage UAE-based warehousing and logistics infrastructure to re-export value-added products efficiently.
Gulf Market Access
UAE acts as a gateway to broader GCC markets, enabling Indian MSMEs to reach customers across the Gulf region.
Africa and Europe Gateway
Strategic location allows Indian firms to use UAE as a platform for accessing African and European markets with value-added products.
Higher Value-Added Exports
This hub-and-spoke model supports higher value-added exports and deeper integration into global value chains. Indian MSMEs can transform from simple exporters to participants in sophisticated international supply networks.
The model enables small and medium enterprises to compete globally by leveraging UAE's world-class infrastructure, strategic location, and connectivity to major markets.
MSME Empowerment
- Reduced Transaction Costs: Streamlined trade procedures lower barriers for smaller exporters
- Infrastructure Access: Use of UAE's ports, airports, and logistics facilities
- Global Value Chains: Integration into international production networks
- Market Diversification: Access to Gulf, Africa, and European markets through UAE
- Technology Transfer: Opportunities for collaboration and innovation
Conclusion: A Strategic Partnership for Growth
The India-UAE Comprehensive Economic Partnership Agreement represents a transformative moment in bilateral economic relations. Signed in February 2022 and operational from May 1, 2022, this agreement creates a robust framework for trade, investment, and economic integration between two major economies.
With the UAE eliminating or reducing tariffs on over 97% of its tariff lines covering 99% of India's exports by value, the CEPA opens unprecedented market access for Indian businesses. Priority sectors including gems and jewellery, textiles and apparel, leather and footwear, pharmaceuticals, engineering goods, and agri-based products stand to benefit significantly from this preferential access.
Beyond goods trade, the agreement's services component creates opportunities in high-value sectors such as IT, business services, professional services, tourism, and education. The establishment of a regulatory cooperation framework for pharmaceuticals demonstrates the depth and comprehensiveness of this partnership.
For Indian MSMEs, the CEPA is particularly transformative. The UAE's role as a hub for sourcing inputs, warehousing, and re-export creates opportunities for small and medium enterprises to participate in global value chains. This hub-and-spoke model enables Indian firms to reach markets across the Gulf, Africa, and Europe, supporting higher value-added exports and deeper integration into international trade networks.
Key Achievements:
- 97%+ tariff elimination covering 99% of India's export value to UAE
- Ambitious target of $100 billion bilateral non-oil trade by 2027
- Comprehensive coverage of goods and services sectors
- Pharmaceutical regulatory cooperation framework
- UAE positioned as strategic hub for Indian MSMEs
- Gateway access to Gulf, African, and European markets
- Support for labour-intensive sectors and employment generation
- Predictable, rules-based framework for long-term cooperation
The India-UAE CEPA demonstrates how comprehensive trade agreements can drive economic growth, strengthen supply chains, and create opportunities across diverse sectors. By facilitating faster, more predictable market access and positioning the UAE as a regional gateway, this agreement sets a foundation for sustained bilateral trade growth and deeper economic integration between India and the UAE.